Journal Articles

Human capital growth and poverty: Evidence from Ethiopia and Peru

Date: 25 April 2017
Authors:
Publisher: Elsevier
Published in: Review of Economic Dynamics
JEL classification: J24, I15
DOI: /10.1016/j.red.2017.02.002

In this paper we use high quality data from two developing countries, Ethiopia and Peru, to estimate the production functions of human capital from age 1 to age 15. We characterize the nature of persistence and dynamic complementarities between two components of human capital: health and cognition. We also explore the implications of different functional form assumptions for the production functions. We find that more able and higher income parents invest more, particularly at younger ages when investments have the greatest impacts. These differences in investments by parental income lead to large gaps in inequality by age 8 that persist through age 15.